UGI Corporation (NYSE:UGI) Q2 2018 Earnings Conference Call - Final Transcript

May 03, 2018 • 09:00 am ET


UGI Corporation (NYSE:UGI) Q2 2018 Earnings Conference Call - Final Transcript


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Good morning. My name is Casey, and I'll be your conference operator today. At this time I'd like to welcome everyone to the UGI Corporation and AmeriGas Partners Fiscal Second Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question-and-answer session.

(Operator Instructions). Thank you.

Mr. Will Ruthrauff, Director of Investor Relations, you may begin your conference.

Will Ruthrauff

Thanks, Casey. Good morning, everyone and thank you for joining us. With me today are Hugh Gallagher, CFO of AmeriGas Propane, Kirk Oliver, CFO of UGI Corporation, Jerry Sheridan, President and CEO of AmeriGas Propane, and John Walsh, President and CEO of UGI.

Before we begin, let me remind you that our comments today will include certain forward-looking statements, which management believes to be reasonable as of today's date only. Actual results may differ significantly because of risks and uncertainties that are difficult to predict. Please read our earnings release and our annual report on Form 10-K for an extensive list of factors that could affect results. We assume no duty to update or revise forward-looking statements to reflect events or circumstances that are different from expectations.

We'll also describe our business using certain non-GAAP financial measures. Reconciliations of these measures to the comparable GAAP measures are available in the appendix of our presentation.

Now, let me turn the call over to John.

John L. Walsh

Thanks, Will. Good morning and welcome to our call. I hope that you've all had the opportunity to review our press release's reporting second quarter results and updated fiscal '18 guidance for UGI and AmeriGas. We had a very strong Q2, achieving record EPS on both the GAAP and adjusted earnings basis. Each of our four businesses contributed higher adjusted net income than in Q2 fiscal '17. Weather was slightly warmer than normal in each of our domestic businesses and slightly colder than normal for UGI International.

Our strong performance in the quarter reflects the positive impact of more normal winter weather in our domestic businesses, our lower effective tax rate following passage of the Tax Reform Act and the continuing earnings contributions from our new investments and acquisitions. I'll comment on noteworthy activities and market developments in Q2, then turn it over to Kirk, who'll provide you with the detailed overview of UGI's financial performance. Jerry will review Q2 for AmeriGas and I'll then wrap up with an update on our strategic initiatives.

We're pleased to once again report record earnings for UGI. Our Q2 GAAP EPS was a $1.57 and our adjusted EPS was a $1.69. That adjusted Q2 EPS was 29% above our Q2 fiscal 2017 adjusted EPS of a $1.31, which at the time was the highest adjusted Q2 earnings reported in UGI's history. Both quarters have an adjusted for mark-to-market valuation of certain hedges and other items which Kirk will cover later. While our Q2 results clearly benefited from the impact of Tax Reform, our underlying business performance was extremely strong. EPS